A new wave of controversy is set to break over Shell, the oil giant, with the publication of a report into the events surrounding its overstatement of oil and gas reserves.
The scandal has rocked the once proud Anglo-Dutch institution and the details of the affair, which it has promised to make public, will cause further embarrassment.
The report, being undertaken by a US law firm under the auspices of the group's audit committee, is understood to be close to completion and its findings could be published within the next week.
Sir Philip Watts, who was ousted from his job as chairman of Shell last month after the scandal provoked a furious response from shareholders, is preparing for more humiliation as his role in the affair will be detailed in the forthcoming report.
Also in the spotlight will be the role played by Walter van de Vijver, who also stood down from his position as Shell's chief executive of exploration and production business.
Investors in Shell were promised in February that the report into the affair, being carried out by Davis Polk & Wardwell, a leading US law firm, would be made public "in a matter of weeks". That was more than two months ago and shareholders are keen to understand how the company came to overstate its energy reserves by more than 20 per cent. The matter is now the subject of investigations by the Financial Services Authority in the UK and the US Securities and Exchange Commission.
A spokesman for Shell said yesterday: "Once management has had the chance to properly and thoroughly review the contents and the implications of the audit committee's final report we plan to make public its main conclusions."
The spokesman refused to comment on reports in the Wall Street Journal yesterday that a draft version of the report was already being circulated among the Shell board and that the report placed the blame for the affair firmly at the door of Sir Philip and Mr van de Vijver.
When Shell first announced it had overstated its energy reserves in January, shareholders were enraged that Sir Philip failed to attend the company's conference call to explain the situation. Despite a desperate attempt to apologise to the City subsequently, Sir Philip eventually fell on his sword because of the scandal. His demise represented one of Britain's biggest corporate scalps but shareholders have yet to hear the details of what went on inside the company to allow such a situation to develop. Shell cut its stated reserves by 3.9 billion barrels overnight, prompting American shareholders to sue the company, alleging it had deliberately misled the stock market about the situation.
Shareholders will be looking to the audit committee's report for any information on when the company knew about its problem with reserves and when it informed the market of the problem.
Shell has refused to comment on reports that it had been warned in early 2002 that its proven reserves might need to be cut because its method of booking those reserves was inconsistent with guidelines laid down by the SEC.
Shareholders will also want to know if the company intends to make any further management changes. Although the departures of Sir Philip and Mr van de Vijver were dramatic in the context of Shell's history, many investors are still demanding more profound changes at the group, which has two boards and is split between its Dutch and British halves.Reuse content